Discuss organizational structure and identify general objectives for Committee

Determine how the Committee will function & what duties it will perform

Determine who should and who should not serve on the Committee

Draft and present Committee charter for modification and adoption; charter to include:

Purpose of Committee

Committee members

Scope of authority

Roles and responsibilities

Meeting frequency

Reporting / documentation requirements

Fiduciary review

Evaluate 404(c ) compliance

The four key responsibilities of a fiduciary

Serve as a advocate – The exclusive benefit rule“a fiduciary must discharge his or her duties for the exclusivebenefit of plan participants and their beneficiaries; and for the purpose of defraying the expenses of administering the plan.”

Be a prudent “expert” – The prudent man rule“a fiduciary must act with care, skill, and diligence that would be exercised by a reasonably prudent person who is familiar with such matters.”

Diversify against risk – The diversification requirement“a fiduciary must provide diversified investments so as to minimize the risk of large losses.”

Govern according to plan policy“a fiduciary has a duty to act in accordance with plan documents, ERISA and the DOL.”

The importance of being a §404(c) plan

By complying with Section 404(c) of the Employee Retirement Income Security Act (ERISA) and applicable Department of Labor regulations, plan fiduciaries can help protect themselves from liability for losses resulting from a plan participant’s investment decisions.

To comply they must first inform the participants that they are responsible for the investment results of their directed accounts (usually incorporated into the Summary Plan Description and the Investment Policy Statement) and they must provide:

Diversified investment options – at least 3 investment choices, each that is diversified, materially different in terms of risk and return characteristics, and when combined with other alternatives tends to reduce the overall risk of loss through diversification, and

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